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Dollar General Shoppers Cut Back on Food as Gas Prices Rise
CEO Todd Vasos Says Core Customer Feels More Pressure, Especially in Rural Communities
Key Takeaways:
- Dollar General CEO Todd Vasos said June 2 its core shoppers are cutting back on food and household spending as rising gas prices strain budgets.
- Vasos said the squeeze is worse in rural areas, and recent SNAP work requirement changes have pushed some customers out of the program.
- Dollar General has added more $1 private-label and $1 frozen items to lure back shoppers.
Some Dollar General Corp. shoppers are cutting back on food and other household expenses due to rising gas prices, CEO Todd Vasos said on the company’s earnings call.
“Our core customer continues to be financially constrained,” Vasos told analysts June 2. “This pressure has been more pronounced on customers in rural communities, as they work to minimize trip distance and make trade-offs in their search for everyday affordability and value.”
Food companies have previously said that consumers are seeking bargains or buying products on sale, but they largely stopped short of saying shoppers were purchasing less food.
Changes to the Supplemental Nutrition Assistance Program have been another headwind for Dollar General’s core customer base, Vasos said. Republicans last year expanded work requirements for people receiving SNAP benefits, which has pushed people out of the program.
The retailer responded by adding more $1 private-label items during the quarter and expanding its slate of $1 frozen items. That helped bring more shoppers into stores.
McCormick & Co. CEO Brendan Foley said June 2 at a Deutsche Bank conference that the company was starting to see a shift in consumers’ behavior as well.
“This idea of a resilient consumer that we’ve been talking about now for many quarter feels like it’s weakening a little bit in a context of rising gas prices,” Foley said.
Kraft Heinz Co. said in May that it was seeing an impact from SNAP changes and anticipated they would reduce its sales by 100 basis points this year.
Dollar General ranks No. 21 on the Transport Topics Top 100 list of the largest private carriers in North America.
